-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LZ0AzIq3Sa/ljYYnAK2bjDRj8YlOPLLOlruO+sLEPXp/lLdOY3FN1znVzDR9YeST ySnCAKgQDb8VCYSMVWlTTw== 0000893220-02-001457.txt : 20021202 0000893220-02-001457.hdr.sgml : 20021202 20021202160816 ACCESSION NUMBER: 0000893220-02-001457 CONFORMED SUBMISSION TYPE: SC 14D9/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20021202 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NCS HEALTHCARE INC CENTRAL INDEX KEY: 0001004990 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 341816187 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 14D9/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-47039 FILM NUMBER: 02846067 BUSINESS ADDRESS: STREET 1: 3201 ENTERPRISE PKWY STREET 2: STE 2200 CITY: BEACHWOOD STATE: OH ZIP: 44122 BUSINESS PHONE: 2165143350 MAIL ADDRESS: STREET 1: 1400 MCDONALD INVESTMENT CENTER STREET 2: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NCS HEALTHCARE INC CENTRAL INDEX KEY: 0001004990 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 341816187 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 14D9/A BUSINESS ADDRESS: STREET 1: 3201 ENTERPRISE PKWY STREET 2: STE 2200 CITY: BEACHWOOD STATE: OH ZIP: 44122 BUSINESS PHONE: 2165143350 MAIL ADDRESS: STREET 1: 1400 MCDONALD INVESTMENT CENTER STREET 2: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114 SC 14D9/A 1 w66300sc14d9za.txt AMENDMENT NO.10 TO SCHEDULE 14D-9 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------ SCHEDULE 14D-9 (AMENDMENT NO. 10) SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------ NCS HEALTHCARE, INC. (Name of Subject Company) NCS HEALTHCARE, INC. (Name of Person Filing Statement) CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) 62887410 (CUSIP Number of Class A Common Stock) CLASS B COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) NOT APPLICABLE (CUSIP Number of Class B Common Stock) ------------------ MARY BETH LEVINE, ESQ. SENIOR VICE PRESIDENT AND CORPORATE COUNSEL NCS HEALTHCARE, INC. 3201 ENTERPRISE PARKWAY, SUITE 220 BEACHWOOD, OHIO 44122 (216) 514-3350 (Name, Address and Telephone Number of Person Authorized to Receive Notice and Communications on Behalf of the Person Filing Statement) ------------------ WITH COPIES TO: H. JEFFREY SCHWARTZ, ESQ. ROBERT B. PINCUS, ESQ. MEGAN LUM MEHALKO, ESQ. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP ONE RODNEY SQUARE 2300 BP TOWER, 200 PUBLIC SQUARE WILMINGTON, DELAWARE 19801 CLEVELAND, OHIO 44114 (302) 651-3000 (216) 363-4500
[ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. This Amendment No. 10 to Schedule 14D-9 amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 originally filed by NCS HealthCare, Inc. (the "Company" or "NCS") on August 20, 2002 and amended on August 21, 2002, August 22, 2002, September 12, 2002, September 30, 2002, October 8, 2002, October 22, 2002, October 29, 2002, October 30, 2002 and November 25, 2002 relating to the tender offer by NCS Acquisition Corp. (the "Offeror"), a Delaware corporation and a wholly owned subsidiary of Omnicare, Inc., a Delaware corporation ("Omnicare"), for all of the outstanding shares of Class A Common Stock, par value $0.01 per share, of NCS and Class B Common Stock, par value $0.01 per share, of NCS, at a price of $3.50 per share, net to the seller in cash (the "Offer"). Except as otherwise indicated, the information set forth in the original Schedule 14D-9 and Amendments No. 1, No. 2, No. 3, No. 4, No. 5, No. 6, No. 7, No. 8 and No. 9 thereto remains unchanged. ITEM 8. ADDITIONAL INFORMATION (b) LEGAL MATTERS Item 8(b) of the Schedule 14D-9 is hereby amended to add the following at the end thereof: On November 26, 2002, the Court of Chancery of the State of Delaware (the "Chancery Court") and the Supreme Court of the State of Delaware denied the plaintiffs' request for an interlocutory appeal from the November 22, 2002 decision of the Chancery Court denying the plaintiffs' motion for a preliminary injunction in the consolidated shareholders litigation brought against NCS (Consolidated C.A. No. 19786). The foregoing paragraph includes a summary of the court orders, and is qualified in its entirety by the full text of the court orders, copies of which are filed as Exhibits 99.18 and 99.19 hereto, and are incorporated herein by reference. ITEM 9. EXHIBITS Item 9 of the Schedule 14D-9 is hereby supplemented by adding the following additional exhibits: EXHIBIT NO. Exhibit 99.18 Order Refusing Application to Certify Interlocutory Appeal, issued by the Court of Chancery of the State of Delaware on November 22, 2002.* Exhibit 99.19 Order of the Supreme Court of the State of Delaware, issued on November 26, 2002.* Exhibit 99.20 Press Release issued by the Company on December 2, 2002.* * Filed herewith. 2 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. NCS HEALTHCARE, INC. By: /s/ Kevin B. Shaw --------------------------------------- Kevin B. Shaw President and Chief Executive Officer Dated: December 2, 2002 EX-99.18 3 w66300exv99w18.txt ORDER REFUSING APPLICATION... EXHIBIT 99.18 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY IN RE NCS HEALTHCARE, INC., ) Consolidated SHAREHOLDERS LITIGATION. ) C.A. No. 19786 ORDER REFUSING APPLICATION TO CERTIFY INTERLOCUTORY APPEAL 1. The plaintiffs move pursuant to Rule 42 of the Rules of the Supreme Court of Delaware for an order certifying an interlocutory appeal from this court's Memorandum Opinion and Order of November 22, 2002 denying their motion for a preliminary injunction ("Opinion").(1) 2. The plaintiffs are stockholders of NCS Healthcare, Inc. ("NCS"), an insolvent Delaware corporation. They sought an injunction against the consummation of an agreement and plan of merger between NCS and Genesis Health Ventures, Inc. ("Genesis"), a Pennsylvania corporation. That merger agreement will be voted upon at a meeting of the NCS stockholders scheduled to be held on December 5,2002. If it is consummated, each share of NCS common - ------------------ (1) The 15-page application is plainly out of compliance with the 4-page limitation found in Supreme Court Rule 30. Because this is a rule of the Delaware Supreme Court, its enforcement properly rests in that court's hands. 1 stock will be converted into the right to receive 0.1 share of Genesis common stock. 3. The merger agreement, which was signed on July 28,2002, contains a provision authorized by Section 251(c) of the Delaware General Corporation Law ("DGCL") requiring that the agreement be put to a stockholder vote even if the NCS board of directors should subsequently determine that the agreement is no longer advisable and recommend that the stockholders vote against it. In fact, on October 21, 2002, the NCS board of directors withdrew its recommendation of the Genesis merger in favor of a transaction unconditionally proposed by Omnicare, Inc. In that transaction, the NSC stockholders would receive cash for their shares in an amount equal to roughly twice the value of the consideration offered in the Genesis deal. The other stakeholders of NCS will be treated on terms equal to those proposed in the Genesis merger. At the time the directors approved the Genesis merger in July, however, the Omnicare proposal was not a firm offer, but only a highly conditional proposal to negotiate a transaction. 4. In conjunction with its authorization of the merger agreement on July 28, 2002, the NCS board of directors also gave its approval to certain voting agreements between and among Genesis, NCS and two NCS stockholders who, together, hold a majority of the NCS voting power. By those voting agreements, the two stockholders pledged unconditionally to vote all of their NCS shares in 2 favor of the merger and granted irrevocable proxies to Genesis to vote their shares in accordance with the terms of that agreement. The economic interests of those two stockholders, defendants Outcalt and Shaw, are aligned with those of the other NCS stockholders. The record shows that they agreed to enter into the voting agreements only because Genesis insisted on receiving those agreements as a condition to its willingness to enter into the merger agreement which they viewed favorably at the time. 5. The gravamen of the complaint lies in the fact that the combination of the voting agreements and the Section 251(c) "force the vote" provision assures that the merger will be approved at the December 5, 2002 meeting, thus preventing NCS stockholders from taking advantage of the more favorable Omnicare transaction that emerged in the months following the board's approval of the merger. The theories advanced to support the entry of an injunction, and in the application to certify an interlocutory appeal are that (i) the NCS directors breached their fiduciary duty of care (including the enhanced Revlon(2) duty) when they approved the Genesis merger without adequately exploring the possibility of negotiating a superior proposal with Omnicare, (ii) the deal protection provisions of the Genesis merger agreement fail the Unocal(3) standard of reasonableness - ------------------ (2) Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986). (3) Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985). 3 review, and (iii) that those same provisions, especially the Section 25l(c) "force the vote" provision, amount to an improper abdication of the directors' fiduciary responsibilities, as in the Quickturn case.(4) 6. In reaching its decision, this court considered and rejected each of these arguments. The Opinion first concludes that, under the teaching of Arnold v. Society for Savings Bancorp,(5) the directors' decision to approve the merger was subject to normal business judgment review, rather than the enhanced scrutiny of the Revlon case. Applying this standard, the Opinion held that: [T]he record does not support even a preliminary finding that the NCS directors failed to fulfill their fiduciary duties when they "shopped" Omnicare's proposal to Genesis, obtained a substantial improvement in the terms of that offer and then approved the transaction without contacting Omnicare. The process they followed was certainly a rational one, given the circumstances they confronted.(6) Moreover, the Opinion held that "even applying the more exacting Revlon standard, the directors acted in conformity with their fiduciary duties in seeking to achieve the highest and best transaction that was reasonably available to them."(7) - ------------------ (4) Quickturn Design Systems, Inc. v. Shapiro, 721 A.2d 1281 (Del. 1998). (5) 650 A.2d 1290 (Del. 1994). (6) Opinion, p. 41. (7) Id. 4 7. The Opinion also considered and rejected the Unocal challenge to the deal protection provisions of the Genesis merger agreement, in the following terms: This court is always solicitous of the rights of stockholders of Delaware corporations, and it will act to enjoin the operation of terms of merger agreements that unreasonably coerce or preclude stockholders from deciding whether or not to approve or ratify a merger agreement. In the circumstances of this case, however, it cannot be said that director approval of the voting agreements, even in conjunction with the Section 251(c) provision in the merger agreement, acted as an unreasonable "lock-up" of the Genesis transaction. On the contrary, the perceived threat NCS faced was the potential loss of the Genesis deal followed by a downward spiral in the price offered for NCS. The record shows that the directors questioned the need for these provisions and agreed to them only because Genesis was unwilling to commit itself to the transaction without them. Moreover, the board was aware that Outcalt and Shaw had expressed a willingness to enter into the voting agreements only as a means of achieving the Genesis transaction and without material conflicting interests. There is also no suggestion in this record that the directors authorized these terms or agreements in order to preclude what they knew or should have known was a superior transaction. On the contrary, at the time the directors acted to meet the Genesis deadline, the only proposal reasonably available to them was the one they adopted. Finally, Omnicare certainly is not precluded from making a bid for the combined NCS/Genesis entity, as Gemunder admitted in his testimony.(8) Indeed, Omnicare's financial advisors have already begun to analyze such a transaction.(9) - ------------------ (8) Gemunder Dep. at 309. (9) See Whitney Aff. Ex. 33. 5 8. The Opinion does not directly address itself to the plaintiffs' last argument because the court regarded it as insubstantial. It is simply nonsensical to say that a board of directors abdicates its duty to manage the "business and affairs" of a corporation under Section 141(a) of the DGCL by agreeing to the inclusion in a merger agreement of a term expressly authorized by Section 251(c) of that same statute. As pointed out in the Opinion, the 1998 amendment to Section 251(c) was intended to remediate the problem encountered when a board of directors decided to withdraw its recommendation in favor of a previously approved merger agreement."(10) Certainly, Quicktum is no authority for such a novel and troubling proposition. Rule 42 9. Applications for interlocutory review are granted only in exceptional circumstances, as to balance the goals of "advancing appellate review of potentially case dispositive issues" while "avoiding fragmentation and delay when interlocutory review is unlikely to terminate the litigation or otherwise serve the administration of justice."(11) - ------------------ (10) See Opinion, p. 43 at n.57. (11) Donald J. Wolfe, Jr. and Michael A. Pittenger, "Corporate and Commercial Practice in the Delaware Court of Chancery," Section 14-4 at 14-5 (2000) (hereinafter "Wolfe & Pittenger"). 6 10. This court should certify an appeal only if the ruling appealed from (i) determines a substantial issue; (ii) establishes a legal right; and (iii) meets one of the criteria in Rule 42(b)(i)-(v). The test is conjunctive, so that all elements must be present.(12) In light of these standards, the plaintiffs' application should be denied. Substantial issue and legal right 11. The Opinion did not determine a substantial issue. The Delaware Supreme Court has explained that, "generally speaking, the substantive element of the appealability of an interlocutory order must relate to the merits of the case.... This is essential to the limitation of appeals and the avoidance of fragmentation of cases necessary to the efficient operation of our system."(13) Instead, while the Opinion did, of course, address itself to the merits of the plaintiffs' case, it merely applied well established law to a set of facts appearing in a highly complex record and made preliminary findings based on those facts. That decision is, of course, not a final decision on the merits. 12. For the same reasons, the Opinion also did not establish a legal right. "[A] legal right is established where the court determines an issue essential to the - ------------------ (12) Nadler v. Bohen, 238 A.2d 836,837 (Del. Supr. 1968). (13) Castaldo v. Pittsburgh-Des Moines Steel Co., 301 A.2d 87, 88 (Del. Supr. 1973). 7 position of the parties regarding the merits of the case, and a legal right generally is not established where either party may yet prevail at trial."(14) The Opinion from which the plaintiffs seek to appeal does not include any findings that would prevent any party from prevailing at trial. The Delaware Supreme Court has often held that denial of preliminary injunctive relief in circumstances similar to those presented in this matter does not satisfy the requirements of Rule 42(b) or merit interlocutory review.(15) 13. Of the other criteria found in Rule 42(b)(i)-(v), only the catch-all that early review "may otherwise serve the interests of justice" is arguably available to the plaintiffs. The Opinion does not decide any novel issues of law, but, instead, applies well-established principles to a complex set of facts dealing with a two year long process of rescuing NCS from insolvency. The Opinion also does not conflict with other decisions of Delaware courts and does not address the constitutionality of or construction of any statute of this State. Finally, it seems unlikely that a review of the Opinion will terminate or reduce further litigation or otherwise serve the interests of justice. - ------------------ (14) Wolfe & Pittenger, Section 14-4[c] at 14-8. (l5) Emerson Radio Corp. v. International Jensen Inc., 683 A.2d 58, 1996 WL 526015 (Del. 1996)(TABLE); In re RJR Nabisco, Inc. Shareholders Litig., 556 A.2d 1070, 1989 WL 16907 (Del. 1989) (TABLE). 8 14. For these reasons, and for all the other reasons already discussed, the application to certify the appeal is DENIED. IT IS SO ORDERED this 26th day of November, 2002. /s/ Stephen P. Lamb ----------------------------------- Vice Chancellor 9 EX-99.19 4 w66300exv99w19.txt ORDER OF THE SUPREME COURT FOR STATE OF DELAWARE EXHIBIT 99.19 IN THE SUPREME COURT OF THE STATE OF DELAWARE R0BERT M. MILES, GUILLERMO MARTI, ) ANTHONY NOBLE, JEFFREY TREADWAY, ) TILLIE SALTZMAN, DOLPHIN LIMITED ) No. 649, 2002 PARTNERSHIP I, L.P., RAMESH MEHAN, ) RENEE MEHAN, RENEE MEHAN IRA, ) SAROJ MEHAN, MANEESH MEHAN, RAHUL ) MEHAN, JOEL MEHAN, LAJIA MEHAN, DARSHAN ) MEHAN IRA, DANSHAL MEHAN (ROLLOVER IRA), ) ARSH N. MEHAN, ARSH N. MEHAN (ROTH IRA), )Court Below-Court of Chancery of ASHOK K. MEHAN, and ASHOK K. MEHAN IRA, )the State of Delaware, in and for )New Castle County C.A. No. Plaintiffs Below- )19786-NC Appellants, ) V. ) ) JON H. OUTCALT, KEVIN E. SHAW, ) BOAKE A. SELLS, RICHARD L. ) OSBORNE, GENESIS HEALTH VENTURES, ) INC., GENESIS SUB, INC., and ) NCS HEALTHCARE, INC., ) ) Defendants Below- ) Appellees, Submitted: November 26, 2002 Decided: November 26, 2002 Before VEASEY, Chief Justice, BERGER, and STEELE, Justices. ORDER This 26th day of November 2002, it appears to the Court that: (1) The plaintiffs-appellants are shareholders of defendant-appellee NCS Healthcare, Inc. ("NCS"). They have petitioned this Court, pursuant to Supreme Court Rule 42, to accept an appeal from an interlocutory order of the Court of Chancery dated November 22, 2002. The Court of Chancery's decision denied the plaintiffs' application for a preliminary injunction to prevent a proposed merger between NCS and Genesis Health Ventures; Inc. The proposed merger will be voted on at a special meeting of NCS shareholders scheduled for December 5, 2002. (2) Plaintiffs filed their application for certification to take an interlocutory appeal in the Court of Chancery on November 25, 2002. The Court of Chancery denied the certification application. (3) Applications for interlocutory review are addressed to the sound discretion of this Court. In the exercise of its discretion, this Court has concluded that the application for interlocutory review does not meet the requirements of Supreme Court Rule 42(b) and should be refused. NOW, THEREFORE, IT IS HEREBY ORDERED that the within interlocutory appeal is REFUSED. BY THE COURT /s/ Myron T. Steele ----------------------- Justice -2- EX-99.20 5 w66300exv99w20.txt PRESS RELEASE DATED DECEMBER 2, 2002. EXHIBIT 99.20 FOR IMMEDIATE RELEASE Contact: Gerald D. Stethem Senior Vice President & Chief Financial Officer NCS HealthCare, Inc. 216-378-6808 DECISION IN FAVOR OF NCS/GENESIS MERGER STANDS AS DELAWARE COURTS DENY REQUEST FOR INTERLOCUTORY APPEAL Beachwood, Ohio - (December 2, 2002) NCS HealthCare, Inc. (NCSS.OB) announced today that the Delaware Supreme Court and Delaware Chancery Court have denied a request for an interlocutory appeal from the Chancery Court's recent decision in favor of NCS's proposed merger with Genesis Health Ventures, Inc. (NASDAQ:GHVI). As previously announced, on November 22, 2002, the Delaware Chancery Court denied a request for a preliminary injunction that would have delayed or possibly prevented the proposed NCS/Genesis merger. The Chancery Court also rejected plaintiffs' claims that the NCS Board of Directors breached its fiduciary duties by approving the merger agreement with Genesis and certain related voting agreements. Although the plaintiffs in the litigation sought permission to appeal the Chancery Court's rulings, both the Delaware Supreme Court and the Delaware Chancery Court have denied this request. In denying plaintiffs' motion for an interlocutory appeal, the Delaware Chancery Court said that its opinion denying an injunction on the fiduciary duty claims "does not decide any novel issues of law, but, instead, applies well-established principles to a complex set of facts dealing with a two year long process of rescuing NCS from insolvency." NCS stockholders are scheduled to vote on the Genesis merger at a special meeting to be held on December 5, 2002. Due to the voting agreements entered into by NCS Chairman, Jon Outcalt, and NCS President and CEO, Kevin Shaw, who collectively own approximately 64% of NCS's total voting power, stockholder approval of the merger is assured. The Genesis merger is now expected to be completed on or about December 12, 2002. NCS noted that an earlier ruling of the Delaware Chancery Court holding that Omnicare, Inc. did not have standing to assert certain claims against the NCS directors and that the voting agreements entered into by Messrs. Outcalt and Shaw did not cause the conversion of the high vote Class B shares into low vote Class A shares has been appealed by Omnicare to the Delaware Supreme Court and that the appeal is scheduled to be heard on December 3, 2002. NCS is represented by special outside legal counsel Benesch, Friedlander, Coplan & Aronoff LLP and Skadden, Arps, Slate, Meagher & Flom LLP and financial advisor Candlewood Partners, LLC. NCS HealthCare, Inc. is a leading provider of pharmaceutical and related services to long-term care facilities, including skilled nursing centers, assisted living facilities and hospitals. NCS serves approximately 200,000 residents of long-term care facilities in 33 states and manages hospital pharmacies in 10 states. In connection with the special meeting of stockholders relating to NCS's proposed merger with Genesis Health Ventures, Inc. and a pending tender offer from Omnicare, Inc., NCS HealthCare, Inc. has filed certain materials with the Securities and Exchange Commission, including a definitive proxy statement and a Solicitation/Recommendation Statement on Schedule 14D-9. SECURITY HOLDERS ARE URGED TO READ THESE MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of these materials, as well as other materials filed with the Securities and Exchange Commission concerning NCS HealthCare, Inc., at the Securities and Exchange Commission's website at http://www.sec.gov. In addition, these materials and other documents may be obtained for free from NCS HealthCare, Inc. by directing a request to NCS HealthCare, Inc. at 3201 Enterprise Parkway, Suite 220, Beachwood, Ohio 44122; Attn: Investor Relations. NCS HealthCare, Inc. and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company's stockholders with respect to the special meeting described above. Information concerning such participants is contained in NCS HealthCare's proxy statement relating to the proposed merger with Genesis Health Ventures, Inc. -----END PRIVACY-ENHANCED MESSAGE-----